UNITED STATES – Volkswagen AG’s commercial truck unit, Traton, has offered $35 a share, or $2.9 billion, for the shares of U.S. truck maker Navistar International that it does not already own.

Traton while giving the news on its offer to Navistar said its offer was subject to Navistar and Traton reaching a merger agreement.

Volkswagen has made its interest in buying the remainder of Navistar clear since acquiring an initial 16.6% stake, which had by 2016 grown to nearly 16.8%, in 2016.

The two truck companies have been working towards reducing annual costs by US$200 million a year through collaboration on purchasing and on certain technology developments.

Traton and Navisor also announced in 2017 that they would collaborate on electric truck development in an effort to come up with environment friendly vehicles.

For the transaction to be successful, Reuters reports that Traton will have to win over Navistar’s largest shareholder, financier Carl Icahn, whose fund controls 16.9% of Navistar’s shares.

Icahn and two other activist funds, Mark Rachesky’s MHR Fund Management and Gabelli Funds, together own 40% of Navistar’s shares, according to Refinitiv data.

Rachesky and another MHR executive, Raymond Miller, sit on Navistar’s board, as does a representative of Icahn’s interests.

Traton Chief Executive Andreas Renschler and the German truck maker’s chief financial officer, Christian Schulz, also have seats on Navistar’s board.

In its response, Navistar, which is based near Chicago, released a statement saying that Traton’s offer unsolicited and that its board would “carefully review and evaluate the proposal in the context of Navistar’s strategic plan for the company.”

Navistar has been restructuring its operations under Chairman and Chief Executive Troy Clarke since 2013, and last fall rolled out a new five-year plan called “Navistar 4.0”.

The plan aims to increase pre-tax profit margins to 12% by the end of 2024 from just under 8% for the fiscal year ended Oct. 31.

Volkswagen’s Traton owns various European commercial truck brands including MAN, Scania and Volkswagen trucks.

It has however lacked a strong North American footprint to compete with Daimler AG’s Freightliner operations, Paccar Inc: which owns the Peterbilt and Kenworth brands, or Volvo Group’s Mack truck business.